Should I Buy Renters' Insurance?

If you are a tenant, learn the benefits of renters' insurance and how it will protect you.

Question

My lease requires that I purchase renters’ insurance. Aside from my phone and laptop, I don’t have many valuable items. Do I really need to buy renters’ insurance?

Answer

If it’s in your lease, you better get the insurance. Savvy landlords will follow up and make sure you do, by having you provide proof of purchase, such as a certificate of insurance from your company. Failure to comply with a lease requirement like this might give the landlord grounds for eviction.

Even if your landlord does not require renters’ insurance, there are many good reasons to buy it. Here are some of the main ones:

Renters’ insurance will cover you if someone is injured in your apartment as a result of your carelessness. For example, if a friend breaks his ankle after tripping over skateboards you’ve left outside your door, you might be liable for your friend’s medical expenses (and more).

Renters’ insurance will cover damage to the rental unit that you caused—for example, if drapes are destroyed by a fire caused by a candle you kept too close to the window. Or, if you have a major bedbug infestation that’s clearly your fault (not always easy to prove), you may get some help from your renters’ insurance when it comes to covering the cost of a new mattress.

Renters’ insurance will cover loss or damage to your property, such as from a theft (including some losses that occur away from home) or natural disasters, such as a flood, beyond the landlord’s control. (If you live in an area prone to certain types of natural disasters, such as floods or earthquakes, you may need to pay extra for this coverage.)

If you’re hoping that your landlord’s insurance will cover the above losses or damages, think again. The landlord’s insurance will not cover these losses or damages unless the landlord’s negligence has been a factor—for example, if water damage to your furniture is caused by a leaky roof that your landlord knew about, but failed to fix.

And the bottom line is that renters’ insurance is typically not that expensive. Depending on where you live and the size of your apartment and the value of your possessions, renters’ insurance might cost a few hundred dollars a year for a $50,000 policy.

For more on the subject, including how to shop for renters’ insurance, see the Nolo article Renters’ Insurance.